Return
to Story Page
To print: Select File and then Print from your
browser's menu
Dale Faulken
LONDON, Aug 6: European shares remained lower on Thursday as investors fretted over the possibility that Wall Street will tumble further before buyers return in numbers. The Dow, which has dropped around nine per cent over the past three weeks, managed to close 59 points higher on Wednesday but the advance seemed tentative as participants remained skittish about a widely expected slide.
Strategists have been looking for a modest sell-off for some months to take the steam out of a meteoric advance that has seen the Dow soar more than 120 per cent in around three and a half years.
"Europe and Asia clearly are not convinced by last night's rally and that's fair comment," said the head of share trading at a London brokerage specialising in US stocks. The Dow looked set for a weaker opening later on Thursday, dealers said. The S&P 500 futures contract, an indicator on how the Dow is likely to start trade, was down 4.50 points by midday.
One point on the S&P normally translates into eight points on the cash LONDON, Aug 6: European shares remained lower on Thursday as investors fretted over the possibility that Wall Street will tumble further before buyers return in numbers. The Dow, which has dropped around nine per cent over the past three weeks, managed to close 59 points higher on Wednesday but the advance seemed tentative as participants remained skittish about a widely expected slide.
Strategists have been looking for a modest sell-off for some months to take the steam out of a meteoric advance that has seen the Dow soar more than 120 per cent in around three and a half years.
"Europe and Asia clearly are not convinced by last night's rally and that's fair comment," said the head of share trading at a London brokerage specialising in US stocks. The Dow looked set for a weaker opening later on Thursday, dealers said. The S&P 500 futures contract, an indicator on how the Dow is likely to start trade, was down 4.50 points by midday.
One point on the S&P normally translates into eight points on the cashmarket. The dollar was firmer against both the mark and the yen but the British pound weakened as dealers began to take the view that British interest rates may have peaked. The Bank of England left interest rates unchanged on Thursday, ending weeks of market speculation amid signs of a recession in manufacturing and slowing domestic demand for goods and services.
In London, Europe's biggest bourse was little moved by the interest rate news, trading at a near six-month low of 5,595, down 37 points or 0.66 per cent. Trading volumes were moderate as investors awaited Wall Street's opening as well as key US jobs and wage inflation data on Friday.
In Frankfurt, the DAX-30 share index was down 1.22 per cent while in Paris the CAC-40 eased 0.69 per cent. Bond markets were steady with the US T-bond marginally easier but dealers expected quiet conditions ahead of Friday's July US unemployment report. "The fundamentals for the bond market haven't changed," said Dick Howard, director of economic research at BankJulius Baer in London. "We have a growth picture which is moderate. We have low inflation with no immediate sings of a pickup. It is just the labour market which is the crucial question near term."
Any sign of a tightening in the US labour market or a rise in wage inflation would raise fears of a possible US interest rate increase, normally a bearish sign for bond markets.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------